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Winchester Payday Loans Can Cover Short-Term Financial Shortages

Winchester payday loans companies can offer residents of the city a borrowing option to cover short-term financial shortages. Payday loans are designed for short-term needs, and are not an appropriate vehicle for long-term borrowing. Consumers are advised to look for members of the Consumer Finance Association, when choosing a payday loan company. Members of the Association do not target those with debt problems, or lend to those who they do not believe will be able to repay.

Payday loans are specifically designed for short-term borrowing needs. For example they might be appropriate if money needed to be borrowed to replace a household appliance (e. G. A washing machine), where the cost of repayment can be reasonably covered by the next pay packet.

For long-term borrowing needs, payday loans are not a good option, and responsible lenders, such as members of the Consumer Finance Association, undertake not to lend to those who they do not believe will be able to repay on the due date.

The annual cost (expressed as an APR) of interest and rollover charges on a payday loan can be very high, which is why the CFA regard it as important to promote payday loans for short-term needs only. The CFA have pointed out that compared to other short-term borrowing situations (such as incurring bank charges due to an authorised overdraft), a payday loan can be the lower cost option.

In general those who take payday loans will tend to be those who have difficulty accessing other forms of credit. The amount typically borrowed will usually be less than 500 pounds. Payday loans are an unsecured form of credit, which means no collateral or security is needed. Some customers find this an advantage when compared to borrowing from a pawnshop, which requires some security to be deposited, such as jewellery or a television set.

Another important undertaking given by Consumer Finance Association members, is that they will not target people who have debt problems. The CFA are keen to promote responsible lending from their members, and responsible borrowing from their customers. Often people with debt problems will borrow more money to pay interest and charges on their original debts.

This is never a good idea, and people in this situation are much better advised to tackle their debt problems rather than taking on more debt. Debt counselling in the UK is available on a free and confidential basis from charities such as local Citizens Advice Bureau, and from national organisations such as the Consumer Credit Counseling Society.

Winchester payday loans are one option to cover short-term financial difficulties, but responsible lenders such as Consumer Finance Association members, would wish to avoid encouraging customers to use these loans as a method for long-term borrowing, or to avoid having to deal properly with debt problems. When choosing Winchester payday loans it may be advisable to check that the company is a Consumer Finance Association member. This Association aims to promote responsible borrowing and lending, only lending to those who can afford to repay, and not targeting those with debt problems.